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whether a price ceiling is placed above or below the equilibirium price, it will always result...

whether a price ceiling is placed above or below the equilibirium price, it will always result in a surplus of the good. explain what's wrong with this statement

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Answer #1

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The statement should be
a price ceiling is placed below the equilibrium price, it will always result in a shortage of the good

The price ceiling is effective only when the price ceiling is placed below the equilibrium price below the price ceiling is maximum price producer can charge to protect consumer if it is above the equilibrium then the price will not be effective an the market will clear at the equilibrium price.
The price ceiling is below equilibrium price so the quantity demanded is more than the quantity supplied at price ceiling so there is the shortage of effective price ceiling.

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